UP mega road plan to sharply cut NHAI tolls

New Delhi: The National Highways Authority of India (NHAI) could potentially lose toll revenues on road investments worth Rs3,378 crore spent under the Golden Quadrilateral project in Uttar Pradesh, if the eight-lane expressway proposed by the state chief minister Mayawati between Greater Noida and Ghazipur is completed.

“All of these projects are EPC (engineering, procurement and construction) contracts and the toll is collected by NHAI itself, and it is possible that these stretches may lose some traffic to the new, swankier highway,” says an official in the department, who is associated with some of these projects and did not wish to be identified.

The Golden Quadrilateral was conceived as an expressway project by the BJP-led National Democratic Alliance, the government that preceded the Congress-led United Progressive Alliance. It was designed to connect the metros of Delhi, Mumbai, Chennai and Kolkata.

Now, the concern is that the Uttar Pradesh government’s proposed project would overlap with the ongoing projects in the section linking New Delhi and Kolkata.

According to the official, there are as many 12 NHAI highway projects in UP, in and around the proposed expressway. The UP government has written to the surface transport ministry seeking clearance for the project. The ministry, in turn, has asked for feedback from NHAI.

The state government intends to develop an access-controlled expressway of about 850km from Greater Noida to Ghazipur, via Bulandshahar, Badaun, Shahjahanpur, Unnao, Pratapgarh, Allahabad and Varanasi, with linkages from Farrukhabad, Lucknow and Mirzapur along the bank of river Ganga.

The project, estimated to cost around Rs25,000 crore, will be executed on a public-private partnership (PPP) model.

NHAI member Nirmaljit Singh told Mint that the Uttar Pradesh government had sought a no-objection from the ministry and that they had forwarded their views. However, he would not elaborate on the same.

A.K. Shrivastava, the principal secretary for infrastructure development in the UP government and who is handling the expressway project, could not be reached over the weekend for comment.

Meanwhile, the NHAI is lobbying the Union government about the impact of the proposed UP project on its own roads.

“We have placed before the ministry a view that the expressway should not affect collections at our existing projects,” said an NHAI official, who, too, did not want to be identified.

Contractors have completed more than 70% of work on all these NHAI projects, which cover Varanasi, Allahabad, Kanpur, Etawah and Agra, among other cities.

Amrit Pandurangi, an infrastructure expert with consultant PricewaterhouseCoopers, says that the “no compete” clause in such road concession agreements, which disallows a project concessionaire from creating a pattern in their project in such a manner that other highways in the vicinity lose traffic, should be carefully worded in this case.

“The existing projects must not lose revenue on account of the new project,” he says. “But, since the expressway project is a PPP, private players will come only if there is a traffic potential for the new expressway of its own.”

The state government has, over the last three-and-a-half months, held at least 25 meetings to discuss the project so far, said a senior officer in the UP government, adding that a consultant will soon be selected through competitive bidding.

Though there is no deadline for the selection of the developer, the process could be wrapped up within six months, this officer said.

Asked if Mayawati, the state’s powerful chief minister, was personally pushing the project, he responded: “Let me put it this way: it couldn’t be pursued so fast without her interest.”